External Failure Costs

Cost of Quality
The total costs incurred to ensure good quality or rectify poor quality. By enhancing quality, managers can reduce costs and boost profits. These costs are categorized into prevention, appraisal, internal failure, and external failure costs.
External Failure Costs
External Failure Costs are all costs associated with defects found after a product or service is delivered to the customer. These costs are crucial for understanding a company's approach to quality management and customer satisfaction.

Accounting Terms Lexicon

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